The Barloworld Group has achieved a resilient performance in what remains a tough operating environment, with the challenges including the ongoing effects of Covid-19 and other socio-economic impacts.
This achievement is driven by the robust performance from industrial equipment, together with the substantial contribution of new acquisitions during the current
financial year. This was further supported by solid, sustainable cost management and strong free cash flow generation by the group’s core operations.
Barloworld Equipment southern Africa continues to deliver strong results despite the impact of Covid-19.
Mining activity levels improved and were supported by strong commodity prices, while construction is also showing some signs of recovery.
Total revenue increased by 1.9% for the eleven months to August 2021 compared to the previous year. Total machine sales and engines were down, while aftermarket revenue was up mainly driven by a double-digit growth in parts sales.
The machine order book remains strong, despite the global supply chain challenges and the goods clearing backlog at the ports of entry across our operating regions, which had a negative impact on machine stock availability.
The strengthening of the rand against the US dollar (USD) resulted in a 7.5% decrease in revenue for the operations in rest of Africa reporting in USD functional currency.
Operating profit was up 66.6% on the back of a continued focus on growing aftersales contribution and operational efficiencies. As a result, the operating margin at 10.3% was well ahead of FY2020 by 400 basis points. The Bartrac joint venture in the Democratic Republic of Congo remains under pressure.
The reduced trading activity, the once-off restructuring costs and impairment of non-operating capital items resulted in a share of loss from the associate.
The division’s relentless efforts to optimise invested capital continues to deliver strong free cash, and the outlook for the division remains positive with a 57% increase in the total firm back order book amounting to R3.6 billion at the end of August 2021 (September 2020: R2.3 billion).